effects Karl Claxton, Centre for Health Economics, University of - - PowerPoint PPT Presentation
Perspective and multi-sectoral effects Karl Claxton, Centre for Health Economics, University of York. www.york.ac.uk/inst/che All effects of social value should count Whats the problem? Costs and benefits fall on different sectors
– Health, consumption and other social arguments – No complete, legitimate and explicit SWF
– Non marginal effects – Displaced wider effects – Dynamic effects – Social consensus and other social objectives
– Budget constrained Health system – Rest of the economy
– Health gained – Costs falling on the health care system – Health forgone
– Costs falling on patients carers – External effects on the wider economy – Net consumption costs/benefits
– Cost effectiveness threshold (how much health give up within HCS) – How much (individual) consumption willing to give up to improve their health h
h
c
h
c k
c c
c
e c
c
c e c c c
c c c
h c
Health gained Health forgone Consumption forgone
h c
Health forgone Consumption forgone
h c
.
h h
.
c c
h c
h c
(formalisation of previous NICE
policy?)
h
h
c k h
h c
h c
h c
h c
h c
c c h k v
h c
– Positive bias due to non marginal change – Policy D may no longer be the best (A when benefits, B when costs)
Type of Technology Bias Decision Bias Decision Bias Decision More effective Net consumption costs Positive costs (NHS) + FP
+ FP Cost saving (NHS) + FP
Net consumption benefits Positive costs (NHS)
+ FP + FP Cost saving (NHS)
+ D
Less effective Net consumption costs Positive costs (NHS) + D
+ D Cost saving (NHS) + FP
Net consumption benefits Positive costs (NHS)
+ FP + FP Cost saving (NHS)
+ FP
improve their own health
– Compare to external benefits forgone – Danger of doubly false positive decisions – Improved heath on average offers benefits to the wider economy – On average a HCS perspective is sufficient! – Is a proper assessment of exceptions possible?
– Price to appropriate any net consumption benefits
– Investment Incentives (technologies, disease and populations)
– Spend less of on health care more on payment of rent (reduce health)
– Potential conflict and long run credibility – Static and dynamic conflicts with social policies and NHS principles
– Health (H) and Education (E) – choose proportion (x) of population i that receives intervention j within programme k – Each jk impact on outcomes and costs in each sector
– Arguments H and E – Weights
– Compensation (WTP) – Not shadow price costs
– Full information – Estimates of respective thresholds
K k I i x K k J j I i x C x c C x c sto K k J j I i x x B B
K k J j I i x x E H
k J j ijk k k ijk E K k J j I i ijk E ijk H K k J j I i ijk H ijk k k ijk K k J j I i ijk E ijk H ijk k k ijk K k J j I i ijk ijk ijk
k k k k k k k k k
1 , 1 1 1 , 1 , 1 1 1 , 1 , 1 , ) ( 1 , 1 , 1 , ) . (
1 1 1 1 1 1 1 1 1 1 1 1 1
– Estimate the shadow prices, i.e., sector specific thresholds
– Value health and education output in terms of consumption – Account for the constraints in project selection
– Allocation of resource though legitimate social process reveals something about a latent welfare function – Interpret shadow prices as revealed but partial expression of social value
– Sector specific output – Sector specific resources – Private consumption (individual preferences)
Health Education Decision Compensation 1 ∆NBH >0 ∆NBE >0 ∆NBH +∆NBE >0 Accept Non required 2 ∆NBH >0 ∆NBE <0 .. .. 0 - ∆NBE from H to E 3 ∆NBH <0 ∆NBE >0 .. .. 0 - ∆NBH from E to H 4 ∆NBH <0 ∆NBE <0 ∆NBH +∆NBE <0 Reject Non possible 5 ∆NBH >0 ∆NBE <0 .. .. H cant compensate E 6 ∆NBH <0 ∆NBE >0 .. .. E cant compensate H
Jamie's school dinners Ritalin for ADHD Sector Net benefit Outputs Resources Consumption Health ∆NBH ∆H - ∆CH /kH ∆H.kH. - ∆CH vH(∆H - ∆CH /kH) Education ∆NBE ∆E - ∆CE /kE ∆E.kE. - ∆CE vE(∆E - ∆CE /kE)